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EXHIBIT 10.28
M A S T E R L E A S E A G R E E M E N T
COMDISCO, INC. " LESSOR
MASTER LEASE AGREEMENT dated March 7, 1994 by and between COMDISCO, INC.
("Lessor") and 3-DIMENSIONAL PHARMACEUTICALS, INC. ("Lessee").
IN CONSIDERATION of the mutual agreements described below, the parties agree as
follows (all capitalized terms are defined in Section 14.19):
1. Property Leased.
Lessor leases to Lessee all of the Equipment described on each Schedule. IN
the event of a conflict, the terms of a Schedule prevail over this Master Lease.
2. Term.
On the Commencement Date, Lessee will be deemed to accept the Equipment,
will be bound to its rental obligations for each item of Equipment and the term
of a Schedule will begin and continue through the initial Term and thereafter
until terminated by either party upon prior written notice received during the
Notice Period. No termination may be effective prior to the expiration of the
Initial Term.
3. Rent and Payment.
Rent is due and payable in advance, in immediately available funds, on the
first day of each Rent Interval to the payee and at the location specified in
Lessor's invoice. Interim Rent is due and payable when invoiced. If any payment
is not made when due, Lessee will pay interest at the Overdue Rate. Upon
Lessee's execution of each Schedule, Lessee will pay Lessor the Advance
specified on the Schedule. The Advance will be credited towards the final Rent
payment if Lessee is not then in default. No interest will be paid on the
Advance.
4. Selection; Warranty and Disclaimer of Warranties.
4.1 Selection. Lessee acknowledges that it has selected the Equipment and
disclaims any reliance upon statements made by the Lessor.
4.2 Warranty and Disclaimer or Warranties. Lessor warrants to Lessee that,
so long as Lessee is not in default, Lessor will not disturb Lessee's quiet and
peaceful possession, and unrestricted use of the Equipment. To the extent
permitted by the manufacturer, Lessor assigns to Lessee during the term of the
Schedule an manufacturer's warranties for the
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Equipment. LESSOR MAKES NO OTHER WARRANTY, EXPRESS OR IMPLIED AS TO ANY MATTER
WHATSOEVER, INCLUDING, WITHOUT LIMITATION, THE MERCHANTABILITY OF THE EQUIPMENT
OR ITS FITNESS FOR A PARTICULAR PURPOSE. Lessor is not responsible for any
liability, claim, loss, damage or expense of any kind (including strict
liability in tort) caused by the Equipment except for any loss or damage caused
by the negligent acts of Lessor. In no event is Lessor responsible for special,
incidental or consequential damages.
5. Title; Relocation or Sublease; and Assignment.
5.1 Title. Lessee holds the Equipment subject and subordinate to the
rights of the Owner, Lessor, any Assignee and any Secured Party. Lessee
authorizes Lessor, as Lessee's agent, to prepare, execute and file in Lessee's
name precautionary Uniform Commercial Code financing statements showing the
interest of the Owner, Lessor, and any Assignee or Secured Party in the
Equipment and to insert serial numbers in Schedules as appropriate. Lessee will,
at its expense, keep the Equipment free and clear from any liens or encumbrances
of any kind (except any caused by Lessor) and will indemnify and hold Lessor,
Owner, any Assignee and Secured Party harmless from and against any loss caused
by Lessee's failure to do so.
5.2 Relocation or Sublease. Upon prior written consent, Lessee may
relocate Equipment to any location within the continental United States provided
(i) the Equipment will not be used by an entity exempt from federal income tax,
(ii) all additional costs (including any administrative fees, additional taxes
and insurance coverage) are reconciled and promptly paid by Lessee.
Lessee may sublease the Equipment upon the reasonable consent of the Lessor
and the Secured Party. Such consent to sublease will be granted if: (i) Lessee
meets the relocation requirement s set out above, (ii) the sublease is expressly
subject and subordinate to the terms of the Schedule, (iii) Lessee assignees its
rights in the sublease to Lessor and the Secured Party as additional collateral
and security, (iv) Lessee's obligation to maintain and insure the Equipment is
not altered, (v) all financing statements required to continue the Secured
Party's prior perfected security interest rate filed, and (vi) the sublease is
not to a leasing entity affiliated with the manufacturer of the Equipment
described on the Schedule. Lessor acknowledges Lessee's right to sublease for a
term which extends beyond the expiration of the Initial Term. If Lessee
subleases the Equipment for a term extending beyond the expiration of such
Initial Term of the applicable Schedule, Lessee will remain obligated upon the
expiration of the Initial Term to return such Equipment, or, at Lessor's sole
discretion to (i) return Like Equipment or (ii) negotiate a mutually acceptable
lease extension or purchase. If the parties cannot mutually agree upon the terms
of an extension or purchase, the term of the Schedule will extend upon the
original terms and conditions until terminated pursuant to Section 2.
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No relocation or sublease will relieve Lessee from any of its obligations
under this Master Lease and the relevant Schedule.
5.3 Assignment by Lessor. The term and conditions of each Schedule have
been fixed by Lessor in order to permit Lessor to sell and/or assign or transfer
its interest or grant a security interest in each Schedule and/or the Equipment
to a Secured Party or Assignee. In that event, the term Lessor will mean the
Assignee and any Secured Party. However, any assignment, sale, or other transfer
by Lessor will not relieve Lessor of its obligations to Lessee and will not
materially change Lessee's duties or materially increase the burdens or risks
imposed of Lessee. The Lessee consents to and will acknowledge such assignments
in a written notice given to Lessee. Lessee also agrees that:
(a) The Secured Party will be entitled to exercise all of Lessor's
rights, but will not be obligated to perform any of the
obligations of Lessor. The Secured Party will not disturb
Lessee's quiet and peaceful possession and unrestricted use of
the Equipment so long as Lessee is not in default and the Secured
Party continues to receive all Rent payable under the Schedule;
and
(b) Lessee will pay all Rent and all other amounts payable to the
Secured Party, despite any defense or claim which it has against
Lessor. Lessee reserves its right to have recourse directly
against Lessor for any defense or claim;
(c) Subject to and without impairment of Lessee's leasehold rights in
the Equipment, Lessee hold the Equipment for the Secured Party to
the extent of the Secured Party's rights in that Equipment.
6. New Lease; Taxes and Fees.
6.1 Net Lease. Each Schedule constitutes a net lease. Lessee's obligations
to pay Rent and all other amounts is absolute and unconditional and is not
subject to any abatement, reduction, set-off, defense, counterclaim,
interruption, deferment or recoupment for any reason whatsoever.
6.2 Taxes and Fees. Lessee will pay when due or reimburse Lessor for all
taxes, fees or any other charges (together with any related interest or
penalties not arising from the negligence of Lessor) accrued for or arising
during the term of each Schedule against Lessor, Lessee of the Equipment by any
governmental authority (except only Federal, state and local taxes on the
capital or the net income of Lessor). Lessor will file all personal property tax
returns for the Equipment and pay all property taxes due. Lessee will reimburse
Lessor for property taxes within thirty (30) days of receipt of an invoice.
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7. Care, Use and Maintenance; Attachments and Reconfigurations; and Inspection
by Lessor.
7.1 Care, Use and Maintenance. Lessee will maintain the Equipment in good
operating order and appearance, protect the Equipment from deterioration, other
than normal war and tear, and will not use the Equipment for any purpose other
than that for which it was designed. IF commercially available, Lessee will
maintain in force a standard maintenance contract with the manufacturer of the
Equipment, or another party acceptable to Lessor, and will provide Lessor with a
complete copy of that contract. If Lessee has the Equipment maintained by a
party other than the manufacturer, Lessee agrees to pay any costs necessary for
the manufacturer to bring the Equipment to then current release, revision and
engineering change levels, and to re-certify the Equipment as eligible for
manufacturer's maintenance at the expiration of the lease term. The lease term
will continue upon the same term and conditions until recertification has been
obtained.
7.2 Attachments and Reconfigurations. Upon receiving the prior written
consent of Lessor, Lessee may reconfigure and install Attachments on the
Equipment. In the event of such a Reconfiguration or Attachment, Lessee will,
upon return of the Equipment, at its expense, restore the Equipment to the
original configuration specified on the Schedule in accordance with the
manufacturer"s specifications and in the same operating order, repair and
appearance as when installed (normal wear and tear excluded). IF any parts of
the Equipment are removed during a Reconfiguration or Attachment, Lessor may
require Lessee to provide additional security, satisfactory to the Lessor, in
order to ensure performance of Lessee's obligations set forth in this
subsection. Neither Attachments nor parts installed on Equipment in the course
of Reconfiguration will be accessions to the Equipment.
7.3 Inspection by Lessor. Upon request, Lessee, during reasonable business
hours and subject to Lessee's security requirements, will make the Equipment and
its related log and maintenance records available to Lessor for inspection.
8. Representations and Warranties of Lessee. Lessee hereby represents,
warrants and covenants that with respect to the Master Lease and each Schedule
executed hereunder:
(a) The Lessee is a corporation duly organized and validly existing
in good standing under the laws of the jurisdiction of its
incorporation, is duly qualified to do business in each
jurisdiction (including the jurisdiction where the Equipment is,
or is to be, located) where its ownership or lease of property or
the conduct of its business requires such qualification; and has
full corporate power and authority to hold property under the
Master Lease and each Schedule and to enter into and perform its
obligations under such Lease.
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(b) The execution and delivery by the Lessee of the Master Lease and
each Schedule and its performance thereunder have been duly
authorized by all necessary corporate action of the part of the
Lessee, and the Master Lease and each Schedule are not
inconsistent with the Lessee's Certificate of Incorporation or
Bylaws, do not contravene any law or governmental rule,
regulation or order applicable to it, do not and will not
contravene any provision of, or constitute a default under, any
indenture, mortgage, contract or other instrument to which it is
a party or by which it is bound, and the Master Lease and each
Schedule constitute legal, valid and binding agreements of the
Lessee, enforceable in accordance with their terms.
(c) There are not actions, suits, proceedings or patent claims
pending or, to the knowledge of the Lessee, threatened against or
affecting the Lessee in any court or before any governmental
commission, board or authority which, if adversely determined,
will have a material adverse effect on the ability of the Lessee
to perform its obligations under the Master Lease and each
Schedule.
(d) The Equipment is personal property and when subjected to use by
the Lessee will not be or become fixtures under applicable law.
(e) The Lessee has no material liabilities or obligations, absolute
or contingent (individually or in the aggregate), except the
liabilities and obligations of the Lessee as set froth in the
Financial Statements and liabilities and obligations which have
occurred in the ordinary course of business, and which have not
been, in any case or in the aggregate, materially adverse to
Lessee's ongoing business.
(f) To the best of the Lessee's knowledge, the Lessee owns,
possesses, has access to, or can become licensed on reasonable
terms under all patents, patent applications, trademarks, trade
names, inventions, franchises, licenses, permits, computer
software and copyrights necessary for the operations of its
business as now conducted, with no known infringement of, or
conflict with, the rights of others.
(g) All material contracts, agreements and instruments to which the
Lessee is a party are in full force and effect in all material
respects, and are valid, binding and enforceable by the Lessee in
accordance with their respective terms, subject to the effect of
applicable bankruptcy and other similar laws affecting the rights
of creditors generally, and rules of law concerning equitable
remedies.
9. Delivery and Return of Equipment.
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Lessee hereby assumes the full expense of transportation and in-transit
insurance to Lessee's premises and installation thereat of the Equipment. Upon
termination (by expiration or otherwise) of each Schedule, Lessee shall pursuant
to Lessor's instructions and at Lessee's full expense (including, without
limitation, expenses of transportation and in-transit insurance), return the
Equipment to Lessor in the same operating order, repair, condition and
appearance as when received, less normal depreciation and wear and tear. Lessee
shall return the Equipment to Lessor at its address set forth herein or at such
other address within the continental United States as directed by Lessor,
provided, however, that Lessee's expense shall be limited to the cost of
returning the equipment to Lessor's address as set forth herein. During the
period subsequent to receipt of a notice under Section 2, Lessor may demonstrate
the Equipment"s operation in place and Lessee will supply any of its personnel
as may reasonable be required to assist in the demonstrations.
10. Labeling.
Upon request, Lessee will mark the Equipment indicating Lessor's interest.
Lessee will keep all Equipment free from any other marking or labeling which
might be interpreted as a claim of ownership.
11. Indemnity.
Lessee will indemnify and hold Lessor, any Assignee and any Secured Party
harmless from and against any and all claims, costs, expenses, damages and
liabilities, including reasonable Attorneys' fees, arising out of the ownership
(for strict liability in tort only), selection, possession, leasing, operation,
control, use, maintenance, delivery, return or other disposition of the
Equipment. However, Lessee is not responsible to a party indemnified hereunder
for any claims, costs, expenses, damages and liabilities occasioned by the
negligent acts of such indemnified party. Lessee agrees to carry bodily injury
and property damage liability insurance during the term of the Master Lease in
amounts and against risks customarily insures against by the Lessee on equipment
owned by it. Any amounts received by Lessor under that insurance will be
credited against Lessee's obligations under this Section.
12. Risk of Loss.
Effective upon delivery and until the Equipment is returned, Lessee
relieves Lessor of responsibility for all risks of physical damage to or loss or
destruction of the Equipment. Lessee will carry casualty insurance for each item
of Equipment in an amount not less than the Casualty Value. All policies for
such insurance will name the Lessor and any Secured Party as additional insured
and as loss payee, and will provide for at least thirty (30) days prior written
notice to the Lessor of cancellation or expiration, and will insure Lessor's
interests regardless of any breach or violation by Lessee of any representation,
warranty or condition contained in such policies and will be primary without
right of contribution from any insurance affected by Lessor. Upon the
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execution of any Schedule, the Lessee will furnish appropriate evidence of such
insurance acceptable to Lessor.
Lessee will promptly repair any damaged item of Equipment unless such
Equipment has suffered a Casualty Loss. Within fifteen (15) days of Casualty
Loss, Lessee will provide written notice of that loss to Lessor and Lessee will,
at Lessor's option, either (a) replace the item of Equipment with Like Equipment
and marketable title to the Like Equipment will automatically vest in Lessor or
(b) pay the Casualty Value and after that payment and the payment of all other
amounts due and owing, Lessee's obligation to pay further Rent for the item of
Equipment will cease.
13. Default, Remedies and Mitigation.
13.1 Default. The occurrence of any one or more of the following Events of
Default constitutes a default under a Schedule:
(a) Lessee's failure to pay Rent or other amounts payable by Lessee
when due if that failure continues for five (5) days after
written notice; or
(b) Lessee's failure to perform any other term or condition of the
Schedule or the material inaccuracy of any representation or
warranty made by the Lessee in the Schedule or in any document or
certificate furnished to the Lessor hereunder if that failure or
inaccuracy continues for ten (10) days after written notice; or
(c) An assignment by Lessee for the benefit of its creditors, the
failure by Lessee to pay its debts when due, the insolvency of
Lessee, the filing by Lessee or the filing against Lessee of any
petition under any bankruptcy or insolvency law of for the
appointment of a trustee or other officer with similar powers,
the adjudication of Lessee as insolvent, the liquidation of
Lessee, or the taking of any action for the purpose of the
foregoing; or
(d) The occurrence of an Event of Default under any Schedule or other
agreement between Lessee and Lessor or its Assignee of Secured
Party.
13.2 Remedies. Upon the occurrence of any of the above Events of Default,
Lessor, at its option, may:
(a) enforce Lessee's performance of the provisions of the applicable
Schedule by appropriate court action in law or in equity;
(b) recover from Lessee any damages and or expenses, including
Default Costs;
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(c) with notice and demand, recover all sums due and accelerate and
recover the present value of the remaining payment stream of all
Rent due under the defaulted Schedule (discounted at the same
rate of interest at which such defaulted Schedule was discounted
with a Secured Party plus any prepayment fees charged to Lessor
by the Secured Party or, if there is no Secured Party, then
discounted at 6%) together will all Rent and other amounts
currently due as liquidated damages and not as a penalty;
(d) with notice and process of law and in compliance with Lessee's
security requirements, Lessor may enter on Lessee's premises to
remove and repossess the Equipment without being liable to Lessee
for damages due to the repossession, except those resulting from
Lessor's, its assignees', agents' or representatives' negligence;
and
(e) pursue any other remedy permitted by law or equity.
The above remedies, in Lessor's discretion and to the extent permitted
by law, are cumulative and may be exercised successively or concurrently.
13.3 Mitigation. Upon return of the Equipment pursuant to the terms of
Section 13.2, Lessor will use its best efforts in accordance with its normal
business procedures (and without obligation to give any priority to such
Equipment) to mitigate Lessor's damages as described below. EXCEPT AS SET FORTH
IN THIS SECTION, LESSEE HEREBY WAIVES ANY RIGHTS NOW OR HEREAFTER CONFERRED BY
STATUTE OR OTHERWISE WHICH MAY REQUIRE LESSOR TO MITIGATE ITS DAMAGES OR MODIFY
ANY OF LESSOR"S RIGHTS OR REMEDIES STATED HEREIN. Lessor may sell, lease or
otherwise dispose of all or any part of the Equipment at a public or private
sale for cash or credit with the privilege of purchasing the Equipment. The
proceeds from any sale, lease or other disposition of the Equipment are defined
as either:
(a) if sold or otherwise disposed of, the cash proceeds less the Fair
Market Value of the Equipment at the expiration of the Initial
Term less the Default Costs; or
(b) if leased, the present value (discounted at three points over the
prime rate as referenced in the Wall Street Journal at the time
of the mitigation) of the rentals for a term not to exceed the
Initial Term, less the Default Costs.
Any proceeds will be applied against liquidate damages and any other sums
due to Lessor from Lessee. However, Lessee is liable to Lessor for, and Lessor
may recover, the amount by which the proceeds are less than the liquidated
damages and other sum due to Lessor from Lessee.
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14. Additional Provisions.
14.1 Board Attendance. Lessor or its duly appointed representative will
have the right to attend Lessee's corporate Board of Directors meetings and
Lessee will give Lessor reasonable notice in advance of any special Board of
Directors meeting, which notice will provide an agenda of the subject matter to
be discussed at such board meeting. Lessee will provided Lessor with a certified
copy of the minutes of each Board of Directors meeting within thirty (30) days
following the date of such meeting held during the term of this Lease.
14.2 Financial Statements. Lessee will provide to Lessor the financial
statements specified in this Section, prepared in accordance with generally
accepted accounting principles, consistently applied (the "Financial
Statements"); provided, however, after the effective date of the initial
registration statement covering a public offering of Lessee's securities, the
term "Financial Statements" will be deemed to refer to only those statements
required by the Securities and Exchange Commission, to be provided no less
frequently than quarterly. Lessee will provide to Lessor (i) as soon as
practicable (within thirty (30) days) after the end of each month, the same
information which Lessee provides to its Board of Directors, but which will
include not less than a monthly income statement, balance sheet and statement of
cash flows, certified by Lessee's Chief Executive or Financial Officer to be
true and correct; and (ii) as soon as practicable (and in any event within
ninety (90) days) after the end of each fiscal year, audited balance sheets as
of the end of such year (consolidated if applicable), and related statements of
income or loss, retained earnings or deficit and changes in the financial
position and capital structure of Lessee for such year, setting forth in
comparative form the corresponding figures for the preceding fiscal year, and
accompanied by an audit report and opinion of the independent certified public
accountants selected by Lessee. Lessee will promptly furnish to Lessor any
additional information (including but not limited to tax returns, income
statements, balance sheets, and names of principal creditors) as Lessor
reasonably believes necessary to evaluate Lessee's continuing ability to meet
financial obligations.
14.3 Obligations to Lease Additional Equipment. Upon notice to Lessee,
Lessor will not be obligated to lease any Equipment which would have a
Commencement Date after said notice if: (i) Lessee is in default under this
Master Lease or any Schedule; (ii) Lessee is in default under any loan
agreement, the result of which would allow the lender or any secured party to
demand immediate payment of the indebtedness; (iii) there is a material adverse
change in Lessee's credit standing; or (iv) Lessor determines (in reasonable
good faith) that Lessee will be unable to perform its obligations under this
Master Lease.
14.4 Merger and Sale Provisions. Lessee will notify Lessor of any
proposed Merger at least sixty (60) days prior to the closing date. Lessor may,
in its discretion, either (i) consent to the assignment of the Master Lease and
all relevant Schedules to the successor entity, or (ii) terminate the Master
Lease and all relevant Schedules. If Lessor elects to consent to the
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assignment, Lessee and its successor will sign the assignment documentation
provided by Lessor. If Lessor elects to terminate the Master Lease and all
relevant Schedules, then Lessee will pay Lessor all amounts then due and owning
and a termination fee equal to the present value (discounted at 6%) of the
remaining Rent for the balance of the Initial Term(s) of all Schedules, and will
return the Equipment in accordance with Section 9.
14.5 Entire Agreement. This Master Lease and associated Schedules
supersede all other oral or written agreements or understandings between the
parties concerning the Equipment including, for example, purchase orders. ANY
AMENDMENT OF THIS MASTER LEASE OR A SCHEDULE, MAY ONLY BE ACCOMPLISHED BY A
WRITING SIGNED BY THE PARTY AGAINST WHOM THE AMENDMENT IS SOUGHT TO BE ENFORCED.
14.6 No Waiver. No action taken by Lessor or Lessee will be deemed to
constitute a waiver of compliance with any representation, warranty or covenant
contained in this Master Lease or a Schedule. The waiver by Lessor or Lessee of
a breach of any provision of this Master Lease or a Schedule will not operate or
be construed as a waiver of any subsequent breach.
14.7 Binding Nature. Each Schedule is binding upon, and inure to the
benefit of Lessor and its assigns. LESSEE MAY NOT ASSIGN ITS RIGHT OR
OBLIGATIONS.
14.8 Survival of Obligation. All agreements, obligations including, but
not limited to those arising under Section 6.2, representations and warranties
contained in this Master Lease, any Schedule or in any document delivered in
connection with those agreements are for the benefit of Lessor and any Assignee
or Secured Party and survive the execution, delivery, expiration or termination
of this Master Lease.
14.9 Notices. Any notice, request or other communication to either party
by the other will be given in writing and deemed received upon the earlier of
actual receipt of three days after mailing if mailed postage prepaid by regular
or airmail or Lessor (to the attention of "Lease Administration") or Lessee, at
the address set out in the Schedule or, one day after it is sent by courier or
on the same day as sent via facsimile transmission, provided that the original
is sent by personal delivery or mail by the receiving party.
14.10 Applicable Law. THIS MASTER LEASE HAS BEEN, AND EACH SCHEDULE
WILL HAVE BEEN MADE, EXECUTED AND DELIVERED IN THE STATE OF ILLINOIS AND WILL BE
GOVERNED AND CONSTRUED FOR ALL PURPOSES IN ACCORDANCE WITH THE LAWS OF THE STATE
OF ILLINOIS WITHOUT GIVING EFFECT TO CONFLICT OF LAW PROVISIONS. NO RIGHTS OR
REMEDIES REFERRED TO IN ARTICLE 2A OF THE UNIFORM COMMERCIAL CODE WILL BE
CONFERRED ON LESSEE UNLESS EXPRESSLY GRANTED IN THIS MASTER LEASE OR A SCHEDULE.
<PAGE>
14.11 Severability. If any one or more of the provisions of this Master
Lease or any Schedule is for any reason held invalid, illegal or unenforceable,
the remaining provisions of his Master Lease and any such Schedule will be
unimpaired, and the invalid, illegal or unenforceable provision replaced by a
mutually acceptable valid, legal and enforceable provision that is closest to
the original intention of the parties.
14.12 Counterparts. This Master Lease and any Schedule may be executed in
any number of counterparts, each of which will be deemed an original, but all
such counterparts together constitute one and the same instrument. If Lessor
grants a security interest in all or any part of a Schedule, the Equipment or
sum payable thereunder, only that counterpart Schedule marked "Secure Party's
Original" can transfer Lessor's rights and all other counterparts will be marked
"Duplicate".
14.13 Nonspecified Features and Licensed Products. If the Equipment is
supplied from Lessor's inventory and contains any features not specified in the
Schedule, Lessee grants Lessor the right to remove any such features. Any
removal will be performed by the manufacturer or another party acceptable to
Lessee, upon the request or Lessor, at a time convenient to Lessee, provided
that Lessee will not unreasonably delay the removal of such features.
Lessee will obtain no title to Licensed Products which will at all times
remain the property of the owner of the Licensed Products. A license from the
owner may be required and it is Lessee"s responsibility to obtain any required
license before the use of the Licensed Products. Lessee agrees to treat the
Licensed Products as confidential information of the owner, to observe all
copyright restrictions, and not to reproduce or sell the Licensed Products.
14.14 Additional Documents. Lessee will, upon execution of this Master
Lease and as may be requested thereafter, provide Lessor with a secretary's
certificate of incumbency and authority and any other documents reasonably
requested by Lessor. Upon the execution of each Schedule with a purchase price
in excess of $1,000,000, Lessee will provide Lessor with an opinion from
Lessee"s counsel in a form acceptable to Lessor regarding the representations
and warranties in Section 8.
14.15 Electronic Communications. Each of the parties may communicate with
the other by electronic means under mutually agreeable terms.
14.16 Lessor's Right to Match. Lessee's rights under Section 5.2 and 7.2
are subject to Lessor's right to match any sublease or upgrade proposed by a
third party. Lessee will provide Lessor with the terms of the third party offer
and Lessor will have three (3) business days to match the offer. Lessee will
obtain such upgrade from or sublease the Equipment to Lessor if Lessor has
timely matched the third party offer.
<PAGE>
14.17 Landlord/Mortgagor Waiver. Lessee agrees to provide Lessor with a
Landlord/Mortgagor Waiver with respect to the Equipment. Such waiver shall be in
a form satisfactory to Lessor.
14.18 Equipment Procurement Charges/Progress Payments. Lessee hereby agrees
that Lessor shall not, by virtue of its entering into this Lease, be required to
remit any payments to any manufacturer or other third party until Lessee accepts
the Equipment subject to this Lease.
14.19 Definitions.
Advance - means the amount due to Lessor by Lessee upon Lessee's execution of
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each Schedule.
Assignee - means an entity to whom Lessor has sold or assigned its rights as
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owner and Lessor of Equipment.
Attachment - means any accessory, equipment or device and the installation
----------
thereof that does not impair the original function or use of the Equipment and
is capable of being removed without causing material damage to the Equipment and
is not an accession to the Equipment.
Casualty Loss - means the irreparable loss or destruction of Equipment.
-------------
Casualty Value - means the greater of the aggregate Rent remaining to be paid
--------------
for the balance of the lease term or the Fair Market Value of the Equipment
immediately prior to the Casualty Loss. However, if a Casualty Value Table is
attached to the relevant Schedule its terms will control.
Commencement Certificate - means the Lessor provided certificate which must be
------------------------
signed by Lessee within ten (10) days of the Commencement Date as requested by
Lessor.
Commencement Date - is defined in each Schedule.
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Default Costs - means reasonable attorney's fees and remarketing costs resulting
-------------
from a Lessee default or Lessor's enforcement of its remedies.
Equipment - means the property described on a Schedule and any replacement for
---------
that property required or permitted by this Master Lease or a Schedule but not
including any Attachment.
Event of Default - means the events described in Subsection 13.1.
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<PAGE>
Fair Market Value - means the aggregate amount which would be obtainable in an
-----------------
arm's-length transaction between an informed and willing buyer/user and an
informed and willing seller under no compulsion to sell.
Initial Term - means the period of time beginning on the first day of the first
------------
full Rent Interval following the Commencement Date for all items of Equipment
and continuing for the number of Rent Intervals indicated on a Schedule.
Installation Date - means the day on which Equipment is installed and qualified
-----------------
for a commercially available manufacturer's standard maintenance contract or
warranty coverage, if available.
Interim Rent - means the pro-rata portion of Rent due for the period from the
------------
Commencement Date through but not including the first day of the first full Rent
Interval included in the Initial Term.
Licensed Products - means the software or the license products attached to the
-----------------
Equipment.
Like Equipment - means replacement Equipment which it lien free and of the same
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model, type, configuration and manufacture as Equipment.
Like Part - means a substituted part which is lien free and of the same
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manufacturer and part number as the removed part, and which when installed on
the Equipment will be eligible for maintenance coverage with the manufacturer of
the Equipment.
Merger - means any consolidation or merger of the Lessee with or into any other
------
corporation or entity, any sale or conveyance of all or substantially all of the
assets of the Lessee to any other person or entity or any stock acquisition of
the Lessee by any other person or entity.
Notice Period - means the time period described in a Schedule during which
-------------
Lessee may give Lessor notice of the termination of the term of that Schedule.
Overdue Rate - means the Lesser of five percent (5%) of the payment due of the
------------
maximum rate permitted by the law of the state where the Equipment is located.
Owner - means the owner of Equipment.
-----
Reconfiguration - means any change to Equipment that would upgrade or downgrade
---------------
the performance capabilities of the Equipment in any way.
<PAGE>
Rent - means the rent, including Interim Rent, Lessee will pay for each item of
----
Equipment expressed in a Schedule wither as a specific amount or an amount equal
to the amount which Lessor pays for an item of Equipment multiplied by a lease
rate factor plus all other amounts due to Lessor under this Master Lease or a
Schedule.
Rent Interval - means a full calendar month or quarter as indicated on a
-------------
Schedule.
Schedule - means an Equipment Schedule which incorporates all of the terms and
--------
conditions of this Master Lease and, for purposes of Section 14.12, its
associated Commencement Certificate(s).
Secured Party - means an entity to whom Lessor has granted a security interest
-------------
in a Schedule and related Equipment for the purpose of securing a loan.
IN WITNESS WHEREOF, the parties hereto have executed this Master Lease on
or as of the day and year first above written.
3-DIMENSIONAL PHARMACEUTICALS, INC. COMDISCO, INC.
as Lessee as Lessor
By: /s/ F. Raymond Salemme By:/s/ Jill C. Hanses
---------------------------------- -----------------------------
Title: President & CEO Title: AVP / Venture Lease
------------------------------- ------------------------
<PAGE>
EXHIBIT A
(MULTIPLE QUARTER DELIVERY)
SCHEDULE NO. VL-1 DATED AS OF March 7, 1994
---- -----------------
MASTER LEASE AGREEMENT DATED AS OF March 7, 1994 ("MASTER LEASE")
-----------------
LESSEE: 3-DIMENSIONAL PHARMACEUTICALS, INC. LESSOR: COMDISCO, INC.
Admin. Contact/Phone No.: Address for all Notices:
------------------------ -----------------------
Scott Horvitz
(215) 222-8950 6111 North River Road
Rosemont, Illinois 60018
Attn: Capital Equipment Lease
Administration
Address for Notices:
-------------------
3700 Market Street
Philadelphia, PA 19104
Attn: Scott Horvitz
Central Billing Location: PAYING AGENT:
------------------------ ------------
Same as above
Comdisco, Inc.
P.O. Box 91744
Attn: Chicago, Illinois 60693
Lessee Reference No.: ---------------------
(24 digits maximum)
Location of Equipment: After Notice to Lessor: Initial Term: 48 months
--------------------- ---------------------- ------------ ---------
Same as above Eagleview Corporate Center
Route 100
Exton, PA Lease Rate Factor: 2.424%
----------------- ------
EQUIPMENT (as defined below): Advance: $36,375.00
------- ----------
Item Machine Type/ Serial
No. Qty. Manufacturer Feature Description Number Rent
--- ---- ------------ ------- ----------- ------ ----
Equipment specifically approved by Lessor, which shall be delivered to and
accepted by Lessee during the period April 18, 1994 through October 18,
1995, for which Lessor receives vendor invoices approved for payment, up to
an aggregate purchase price of
<PAGE>
$1,500,000.00; not including upgrades thereto and further excluding custom
use equipment, leasehold improvements, installation costs and delivery
costs, rolling stock, special tooling, custom equipment, hand held items,
molds and fungible items. In no event shall any furniture exceed ten
percent (10%) of Lessor's aggregate cost hereunder. In no event shall the
total software exceed $100,000.00.
1. Notice Period: Not less than one hundred and twenty (120) days nor more
than twelve (12) months prior to the expiration of the lease term.
2. Equipment Purchase
Lessee acknowledges that it has either received or approved Lessor's
purchase documentation for the Equipment. The aggregate purchase price referred
to on the face of this Schedule shall include all Equipment purchase by Lessor,
consisting of amounts financed under Section (i), (ii) and (iii) below.
(i) NEW EQUIPMENT. Lessor will purchase new Equipment which is
specifically approved by Lessor.
(ii) SALE-LEASEBACK EQUIPMENT. Any in "place Equipment installed at
Lessee's site and to which Lessee has clear title and ownership may
be considered by Lessor for inclusion under this Lease (the "Sale-
Leaseback Transaction"). Any request for a Sale-Leaseback
Transaction must be submitted to Lessor in writing (along with
accompanying evidence of Lessee's Equipment ownership satisfactory
to Lessor for all Equipment submitted) no later than May 18, 1994*.
Lessor will not perform a Sale-Leaseback Transaction for any request
or accompanying Equipment ownership documents which arrive after the
date marked above by an asterisk (*). Further, any sale-leaseback
Equipment will be placed on lease subject to: (1) Lessor prior
approval of the Equipment; and (2) if approved, at Lessor's actual
net appraised Equipment value pursuant to the schedule below:
ORIGINAL EQUIPMENT MANUFACTURER'S PERCENT OF ORIGINAL MANUFACTURER'S
SHIP DATE NET EQUIPMENT COST PAID BY LESSOR
--------------------------------- ----------------------------------
Between 2/19/94 and 5/18/94 100%
Between 12/19/93 and 2/18/94 80%
Between 9/19/93 and 12/18/93 70%
Between 6/19/93 and 9/18/93 65%
Between 3/19/93 and 6/18/93 60%
(iii) USED EQUIPMENT. Lessor will purchase "used" Equipment which is
obtained from a third party by Lessee for its use subject to: (1)
Lessor's prior
<PAGE>
approval of the Equipment; and (2) at the request of Lessor, at
Lessor's appraised value for such used Equipment.
3. Commencement Date
The Commencement Date for each item of Equipment will be its installation
Date. Lessee agrees to confirm the Commencement Date by providing Lessor with
invoices containing the Equipment location, description, serial number and cost,
the Installation Date and Lessee's signature. Lessor will summarize all invoices
and/or IAFs received in the same calendar quarter into a Commencement
Certificate in the form attached to this Schedule as Exhibit 1 and the Initial
Term will begin the first day of the calendar quarter thereafter. Each
Commencement Certificate will incorporate the terms and conditions of the Master
Lease and this Schedule and will constitute a separate Schedule. Notwithstanding
the foregoing, if the Equipment pertains to Sale-Leaseback Equipment, the
Commencement Date will be the date Lessor tenders the purchase price for the
Equipment.
4. Option to Extend
So long as no Event of Default shall have occurred and be continuing,
Lessee will have the right to extend the Initial Term of this Schedule for a
period of one (1) year by giving Lessor at least one hundred and twenty (120)
days written notice prior to the expiration of the Initial Term. In such event,
the rent to be paid during said extended period shall be mutually agreed upon
and if the parties cannot mutually agree, then the Lease shall continue in full
force and effect pursuant to the existing terms and conditions until terminated
in accordance with its terms. This Schedule will continue in effect following
said extended period until terminated by either party upon not less than one
hundred and twenty (120) days prior written notice, which notice shall be
effective as of the Rent Interval next following receipt. Alternatively, at the
expiration of the Initial Term Lessee will have the right to extend the Initial
Term of this Schedule for a one year period at the same lease rate factor as set
forth on the face of this Schedule, by giving Lessor at least 120 days written
notice prior to the expiration of the Initial Term, and at the end of the one
year period, provided all lease payments have been made, title to the Equipment
shall automatically pass to Lessee.
5. Purchase Option
So long as no Event of Default has occurred and is continuing hereunder, and
upon written notice no earlier than twelve (12) months and no later than one
hundred and twenty (120) days prior to the expiration of the Initial Term of
this Schedule, Lessee will have the option at the expiration of the Initial Term
of this Schedule to purchase all, but not less than all, of the Equipment listed
herein for a purchase price and upon terms and conditions to be mutually agreed
upon by the parties following Lessee's written notice, plus any taxes applicable
at the
<PAGE>
time of purchase. Said purchase price shall be paid to Lessor at least thirty
(30) days before the expiration date of the Initial Term. Title to the Equipment
shall automatically pass to Lessee upon payment in full of the purchase price
but, in no event, earlier than the expiration of the fixed Initial Term. If the
parties are unable to agree on the purchase price or the terms and conditions
with respect to said purchase, then the Lease with respect to this Equipment
shall remain in full force and effect. It is agreed and understood that Lessor
is retaining a purchase money security interest in the Equipment listed herein
and this Schedule shall constitute a Security Agreement under the Uniform
Commercial Code of the state in which the Equipment is located. Lessor and
Lessee agree that for purposes of this paragraph, any licensed software will not
be considered part of the Equipment.
6. Special Terms
The terms and conditions of the Master Lease Agreement as they pertain to this
Schedule are hereby modified and amended as follows:
(a) Section 3, "Rent and Payment"
----------------
Delete the third sentence of this Section and replace with the
following:
"Upon Lessee's execution of this Schedule, Lessee will pay Lessor one-
half of the Advance specified on the face of this Schedule ($18,187.50), minus
the commitment fee of $12,000 previously paid by Lessee for a net payment of
$6,187.50. The remainder of the Advance is payable after the first $750,000 of
the lease line has been used, upon the date Lessee submits to Lessor for payment
any invoice(s) requesting any drawdown beyond the initial $750,000 of this lease
line."
(b) Section 5.2, "Relocation or Sublease"
----------------------
To the end of this Section, add the following:
", provided that Lessee may relocate Equipment to the premises of academic
researchers working on joint projects with the Lessee, at Lessee's sole expense,
without the prior written consent of the Lessor if the Lessee provides the
Lessor with prior written notice."
Make a new second paragraph as follows:
"Lessor hereby consents to the relocation of the Equipment by Lessee to
Eagleview Corporate Center, Route 100, Exton, Pennsylvania pursuant to the
terms of the Lease for Combination Office/Laboratory Space dated hereof
between Lessee and The Hankin
<PAGE>
Group, provided that Lessee gives five (5) days prior written notice to
Lessor of such relocation."
(c) Section 6.2, "Taxes and Fees"
--------------
In line 4 after the word "capital", add the words "net worth"; before the
word "income", delete the word "net".
(d) Section 7.1, "Care, Use and Maintenance"
-------------------------
Delete this Section in its entirety and replace with the following:
"Lessee shall, at its sole expense, at all times during the term of each
Equipment Schedule, maintain the Equipment in good operating order, repair,
condition and appearance and protect the Equipment for deterioration, other
than normal wear and tear. Lessee shall not use the Equipment for any
purpose other than that for which it was designed. Lessee shall, at its
sole expense and at its sole discretion, either (i) enter into and maintain
in force, for the term of each Equipment Schedule, an appropriate
maintenance contract with the manufacturer of the Equipment, or such other
of each Equipment Schedule, an appropriate maintenance contract with the
manufacturer of the Equipment, or such other party as shall be acceptable
to Lessor, and shall provide Lessor with a copy of such contract and all
supplements thereto which are applicable to the Equipment; or (ii) self
maintain the Equipment at acceptable standards. If Lessee returns the
Equipment to Lessor at the end of the Initial Term of this Lease, or any
extension thereof, and upon audit of the Equipment Lessor determines that
the Equipment has not been maintained properly or will not be eligible for
a manufacturer's maintenance contract, then Lessee hereby agrees to assume
any costs or expenses necessary to ensure that the Equipment is in good
working order, which may include but need not include, recertification by
the manufacturer. For the purpose of this Section, any reference to
"Equipment" shall include any software included in any such Equipment
Schedule, and any reference to "manufacturer" shall mean the licensor
thereof."
(e) Section 7.2, "Attachments and Reconfigurations"
--------------------------------
In Line 1 before the word "prior", insert the word "after"; after the word
"written", delete the word "consent" and replace with the words "notice
to".
In line 3 before the word "restore" insert the words "have the option to".
In line 5 after the word "excluded", add the words "or else such
Reconfigurations or Attachments shall become the property of the Lessor."
<PAGE>
(f) Section 8, "Representations and Warranties of Lessee"
----------------------------------------
To the end of subsection (e), add the words ", and except in connection
with the transactions contemplated with the Lessor and The Hankin Group."
(g) Section 9, "Delivery and Return of Equipment"
--------------------------------
In line 9, delete the words "and Lessee will supply any of its personnel";
to the end of the last sentence, add the phrase", subject to Lessee"s
normal security procedures and during reasonable hours upon reasonable
advance notice."
(h) Section 13.1, "Default"
-------
In line 3 of subsection (b), delete the word "ten (10)" and replace with
the word "fifteen (15)".
(i) Section 14.1, "Board Attendance"
----------------
Delete this section in its entirety and replace with the following:
"Section 14.1, Board Information.
Lessee agrees to provide to Lessor on a monthly basis: Profit and Loss
Statement, Balance Sheet, Cash Flow Statement and Proforma Operating Plan
(as developed)."
(j) Section 14.2, "Financial Statements"
--------------------
In line 5 after the word "required", delete the word "by" and replace with
the words "to be filed with":
In lines 7 and 8, delete the words "the same information which Lessee
provides to its Board of Directors, but which will include not less than".
In line 10, delete the word "ninety (90)" and replace with the words "one
hundred twenty (120)".
In line 12, delete the words "the financial position" and replace with the
words "cash flows".
In line 15, delete the words "additional information (including but not
limited to".
<PAGE>
In line 16 before the word "Lessor", insert the words "requesting by Lessor
that".
(k) Section 14.3, "Obligation to Lease Additional Equipment"
----------------------------------------
To the end of this Section, add the following:
"Notwithstanding the foregoing, Lessor shall not withhold its consent if
the acquiring entity has a Moody's bond rating of BA3 or better, or the
equivalent if no bond rating is available."
(l) Section 14.4, "Merger and Sale Revisions"
-------------------------
In Line 1, delete the word "sixty (60)" and replace with the word "thirty
(30)".
(m) Section 14.14, "Additional Documents"
--------------------
To the end of this Section, add the words "in a form mutually acceptable to
the parties."
Master Lease: This Schedule is issued pursuant to the Master Lease identified on
page 1 on this Schedule. All of the terms and conditions of the Master Lease are
incorporated in and made a party of this Schedule as if they were expressly set
forth in this Schedule. The parties hereby reaffirm all of the terms and
conditions of the Master Lease (including, without limitation, the
representations and warranties set forth in Section 8) except as modified herein
by this Schedule. This Schedule may not be amended or rescinded except by a
writing signed by both parties.
3-DIMENSIONAL PHARMACEUTICALS, COMDISCO, INC.
INC. as Lessee
As Lessor
By: /s/ F. Raymond Salemme By: Jill C. Hanses
------------------------------- --------------------------------
Title: President & CEO Title: AVP / Venture Lease
--------------------------- -----------------------------
Date: 4/27/94 Date: 5/4/94
---------------------------- ------------------------------
<PAGE>
EXHIBIT 1
COMMENCEMENT CERTIFICATE
------------------------
This Certificate dated is executed pursuant to Schedule No. VL-1 to the Master
Lease Agreement dated March 7, 1994 between Comdisco, Inc. ("Lessor") and
3-Dimensional Pharmaceuticals, Inc. ("Lessee"). All of the terms, conditions,
representations and __________ of the Master Lease and Schedule No. VL-1 are
incorporated herein and made a part hereof and this Commencement Certificate
constitutes a Schedule for the Equipment described below.
1. Equipment:
---------
Equipment
Qty Mfgr Type/Model Serial # Location
(See attached Invoices)
2. Installation date: (See attached Invoices)
-----------------
3. Initial Term Starts on:
----------------------
4. Total Equipment Cost:
--------------------
5. Rent:
----
6. Representations of Lessee:
-------------------------
Each item of Equipment has been delivered to the location indicated above,
tested, inspected, found to be in good working order and accepted by the Lessee
on its Installation Date.
<PAGE>
LOAN AGREEMENT
THIS AGREEMENT (the "Agreement"), dated as of April ___, 1994, is entered
into by and between 3-Dimensional Pharmaceuticals, Inc., a Delaware corporation
(the "Borrower"), and Comdisco, Inc, a Delaware corporation (the "Lender" or
sometimes, "Comdisco"). In consideration of the mutual agreements contained
herein, the parties hereto agree as follows:
WHEREAS, on the date hereof, the Borrower and the Lender are entering into
a Master Lease Agreement (including the Schedules thereto) the ("Equipment
Lease") whereby the Lender agrees to lease to the Borrower equipment (the
"Equipment") with an aggregate purchase price of up to $1,500,000;
WHEREAS, on the date hereof, the Borrower and the Lender are entering into
a Warrant Agreement whereby the Borrower will grant to the Lender warrants to
purchase 179,350 shares of the Borrower"s Series A Preferred Stock;
WHEREAS, Borrower desires to borrow from the Lender hereunder the amount to
$610,000 to finance improvements at a new facility, and Lender is willing to
lend said amount to Borrower on the date hereof;
NOW, THEREFORE, it is agreed:
1. THE LOAN
1.1 Subject to the terms and conditions set forth herein, Lender shall
lend to Borrower the aggregate original principal amount of $610,000 (the
"Loan") on the date hereof (the "Funding Date") with interest at the rate
reflected in the promissory note (the "Note") in the form attached hereto and
made a part hereof as Exhibit A, dated April __, 1994 and payable by Borrower to
the Lender in monthly installments as set forth in the Amortization Schedule
attached to such note as Exhibit B.
1.2 Borrower shall have the option to prepay the principal of each Note,
in whole or in part, at any time after the date hereof by paying the "Prepayment
Amount" which shall mean such principal amount being prepaid together with all
accrued and unpaid interest with respect to such principal amount, as of the
date of such prepayment and a repayment premium equal to the difference, if any,
between A) the amount being prepaid and B) the present value, discounted at the
Treasury Rate of each installment of principal and interest being prepaid
discounted to the date of prepayment. If the amount in subsection 1.2A above is
greater than the amount in subsection 1.2B above, no prepayment premium shall be
due.
The "Treasury Rate" shall mean the then prevailing yield on U.S. Treasury
Constant Maturities for the most recent business day, as quoted in the Federal
Reserve Statistical Release H.15 (519) on the date of prepayment for a Treasury
Obligation with a maturity date closest to the maturity date of the Note.
<PAGE>
2. USE OF PROCEEDS
2.1 The Borrower agrees to use the proceeds of the Loan to pay The Hankin
Group (the "Landlord") for improvements (the "Tenant Improvements") to the
premises located at Eagleview Corporate Center, Route 100, Exton, Uwchlan
Township, Chester County, Pennsylvania (the "New Facility") to be rented by the
Borrower from the Landlord, all of which is pursuant to the Lease for
Combination Office/Laboratory Space dated April ___, 1994 between the Landlord
and the Borrower (the "Lease").
2.2 So long as any amount payable under this Agreement or the Note (the
"Obligations") remains outstanding, then upon the occurrence of an Event of
Default (as defined in Section 8 hereof) under this Agreement or the Note,
Section 9 hereof provides that the Lender will have the right, among other
things, to have the Lease assigned by the Borrower to the Lender.
3. REPRESENTATIONS AND WARRANTIES OF BORROWER
The Borrower represents, warrants and agrees that;
3.1 It has the full power and authority to assign to the Lender the
interest it possesses in the Lease Agreement upon an Event of Default, and
Borrower shall execute such assignment in connection therewith as the Lender may
reasonably request. Except as set forth in the Lease, no lien, security
interest, adverse claim or encumbrance has been created by Borrower or is known
by Borrower to exist with respect to any Tenant Improvements;
3.2 It is a corporation duly organized, legally existing and in good
standing under the laws of the State of Delaware, and is duly qualified as a
foreign corporation in all jurisdictions where the property owned of the
business transacted by it make such qualifications necessary.
3.3 The execution, delivery and performance of the Note, this Agreement,
and all certificates and other documents required to be delivered or executed in
connection herewith (collectively the "Documents") have been duly authorized by
all necessary corporate action of Borrower, the individual or individuals
executing the Documents were duly authorized to do so, and the Documents
constitute legal, valid and binding obligations of the Borrower enforceable in
accordance with their respective terms, subject to applicable bankruptcy,
insolvency, reorganization or other similar laws generally affecting the
enforcement of the rights of creditors;
3.4 The Documents do not and will not violate any provisions of its
article or certificate of incorporation, bylaws or any contract, agreement, law,
regulation, order, injunction, judgment, decree or writ to which the Borrower is
subject, or result in the creation or imposition of any lien, security interest
or other encumbrance upon the Tenant Improvements.
3.5 The execution, delivery and performance of the Documents do not
require the consent or approval of any other person or entity including, without
limitation, any regulatory authority or governmental body of the United States
or any state thereof or any political subdivision of the United States or any
state thereof, except the consent of the holders of the Company"s outstanding
Series A Preferred Stock, which consent has been obtained.
<PAGE>
4. INSURANCE AND RISK OF LOSS
4.1 Risk of loss of, damage to or destruction of the Tenant Improvements
shall be borne by the Borrower.
4.2 Effective upon the Funding Date and while there are any obligations
outstanding, Borrower shall cause to be carried and maintained comprehensive
general liability insurance against risks customarily insured against in the
Borrower"s business. Such risks shall include, without limitation, the risks of
death, bodily injury and property damage associated with the Tenant
Improvements. All policies evidencing such insurance shall provide for at least
thirty (30) days prior written notice by the underwriter or insurance company to
the Lender in the event of cancellation or expiration.
4.3 Borrower shall and does hereby indemnify and hold Lender harmless from
and against any and all claims, costs, expenses, damages and liabilities based
on liability in tort including without limitation strict liability in tort)
including reasonable attorneys" fees, arising out of the ownership, possession,
operation, control, use, maintenance, or other disposition of the Tenant
Improvements. Notwithstanding the foregoing, Borrower shall not be responsible
under the terms of this Subsection to a party indemnified hereunder for any
claims, costs, expenses, damages and liabilities occasioned by the negligence or
willful misconduct of such indemnified party.
5. COVENANTS OF BORROWER
Borrower covenants and agrees as follows at all times while any of the
Obligations remain outstanding:.
5.1 Borrower shall maintain the Tenant Improvements in good operating
condition, repair, and appearance and protect same from deterioration, other
than normal wear and tear. Borrower shall not use the Tenant Improvements or
permit its use for any purpose other than for which it was designed.
5.2 Borrower covenants and agrees to pay when due, all taxes, fees or
other charges of any nature whatsoever (together with any related interest or
penalties) now or hereafter imposed or assessed against Borrower, Lender or the
Tenant Improvements or upon the ownership, possession, use operating or
disposition thereof or upon the rents, receipts or earnings arising therefrom or
upon or with respect to the amounts payable to the Lender pursuant to the Note
and this Agreement (excluding any taxes based solely upon Lender"s net income
relating thereto).
5.3 Borrower shall furnish to Lender the financial statements listed
hereinafter, prepared in accordance with generally accepted accounting
principles consistently applied (the "Financial Statements"):
(a) As soon as practicable (and in any event within thirty (30) days)
after the end of each month, a monthly income statement, balance
sheet and statement of cash flows, certified by Borrower"s Chief
Executive or Financial Officer to be true and correct; and
<PAGE>
(b) As soon as practicable (and in any event within one hundred twenty
(120) days) after the end of each fiscal year, audited balance
sheets as of the end of such year (consolidated if applicable), and
related statement of income of loss, retained earnings or deficit
and changes in cash flows of Borrower for such year, setting forth
in comparative form the corresponding figures for the preceding
fiscal year, and accompanied by any audit report and opinion of the
independent certified public accountants selected by Borrower.
(c) Promptly any additional information, including but not limited to,
tax returns, income statements, balance sheets, and names of
principal creditors as requested by Lender that Lender reasonably
believes necessary to evaluate Borrower"s continuing ability to meet
financial obligations.
5.4 Notwithstanding the foregoing, after the effective date of the initial
registration statement covering a public offering of Borrower"s securities, the
term "Financial Statements" shall be deemed to refer to only those statements
required to be filed with the Securities and Exchange Commission, to be provided
no less frequently than quarterly.
6. CONDITIONS PRECEDENT TO LOAN
On or prior to the Funding Date, Borrower will provide to Lender the
following, in form and substance satisfactory to Lender:
6.1 An opinion of counsel substantially in the form of Exhibit C attached
hereto and made a part hereof from counsel for Borrower;
6.2 A certified resolution or other certificate of corporate authority for
the execution and the delivery of, and the performance of all Obligations under
the Documents and all related documentation;
6.3 Incumbency certificate evidencing the authority and facsimile
signatures of the individuals executing the Documents;
6.4 Insurance certificates as required by Section 4 hereof.
6.5 True and correct copies of the leases and mortgage(s), if any, on the
real property occupied by Borrower.
7. DEFAULT
The occurrence of any one or more of the following events shall constitute
an Event of Default hereunder and under the Note;
7.1 The Borrower defaults in the payment of any principal or interest
payable under the Note for more than five (5) days after the due date thereof;
<PAGE>
7.2 The Borrower defaults in the payment or performance of any other
obligation of the Borrower hereunder or under the Note for more than fifteen
(15) days after the Lender has given notice of such default to the Borrower;
7.3 Any representation or warranty made herein by the Borrower shall prove
to have been false or misleading in any material respect;
7.4 The making of an assignment by Borrower for the benefit of its
creditors or the admission by borrower in writing of its inability to pay its
debts as they become due, or in insolvency of Borrower, or the filing by
Borrower of a voluntary petition in bankruptcy, or the adjudication of Borrower
as a bankrupt, or the filing by Borrower of any petition or answer seeking for
itself any reorganization, arrangement, composition, readjustment, liquidation,
dissolution, or similar relief under any present or future statute, law or
regulation, or the filing of any answer by Borrower admitting, or the failure by
Borrower to deny, the material allegations of a petition filed against it for
any such relief, or the seeking of consenting by Borrower to, or acquiescence by
Borrower in, the appointment of any true, receiver or liquidator of Borrower or
of all or any substantial part of the properties of Borrower, or the failure of
Borrower to pay its debts when due, or the commission by Borrower of any act of
bankruptcy as defined in the Federal Bankruptcy Act, as amended;
7.5 The failure by Borrower, with sixty (60) days after the commencement
of any proceeding against Borrower seeking any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any
present or future statute, law or regulation, to obtain the dismissal of such
proceeding or, within sixty (60) days after the appointment, without the written
consent or acquiescence of Lender, of any trustee, receiver of liquidator of
Borrower or of all of nay substantial part of the properties of Borrower, to
vacate such appointment;
7.6 An "Event of Default" as defined in the Equipment Lease shall happen
and be continued.
7.7 An "Event of Default" as defined in the Lease or in any instrument or
instruments evidencing or under which the Borrower has outstanding an aggregate
of at least $1,000,000 principal amount of indebtedness for borrowed money,
shall happen and be continuing, and any payment due thereunder shall become or
be declared to be due and payable prior to its stated payment or maturity date.
8. REMEDIES
8.1 Upon the occurrence of any one or more Events of Default, Lender, at
its option, may declare the Note to be accelerated and due and payable,
whereupon the unpaid principal of and accrued interest on such Note shall become
immediately due and payable, and the Lender may exercise all rights and remedies
available to it under applicable law. The Lender shall be entitled to receive,
as additional Indebtedness hereunder (a) interest at the maximum interest rate
per annum permitted by law on all amounts not paid when due under the Note or
this Agreement, for the period such amounts are overdue, and (b) reimbursement
for all reasonable costs, attorneys" fees and legal expenses incurred by it in
exercising such rights and remedies.
<PAGE>
8.2 Upon the happening and during the continuance of any Event of Default,
Lender may then, or at any time thereafter and from time to time, have the right
to lease and receive from a subsequent sub-lessee of said Lease that portion of
rentals under the Lease up to the maximum excess permitted for a sublease under
the Lease. If the Lender exercises its right to assume the Lease hereunder, then
the Borrower shall immediately enter into an assignment of the Lease attached
hereto and shall immediately take all such action necessary to obtain the
consent of the Landlord of such assignment.
9. MISCELLANEOUS
9.1 Borrower shall remain personally liable to Lender for any unpaid
Obligations, advances, costs, charges and expenses, together with interest
thereon and shall pay the same immediately to Lender at Lender"s offices.
9.2 The powers conferred upon Lender by this Agreement are solely to
protect its rights hereunder and shall not impose any duty upon Lender to
exercise any such powers.
9.3 This is a continuing Agreement and the rights granted hereunder shall
remain in force and effect and all the rights, powers and remedies of Lender
hereunder shall continue to exist until the Note is paid in full as the same
become due and payable. The rights, powers and remedies given by statute or rule
of law and are cumulative. The exercise of any one or more of the rights, powers
and remedies provided herein shall not be construed as a waiver of any other
rights, powers and remedies of Lender.
9.4 Upon payment in full of all Obligations, the Lender shall cancel the
Note, and this Agreement shall promptly deliver all such cancelled documents to
the Borrower.
9.5 This Agreement and the Note shall be contracts made under and governed
by the laws of the State of Illinois, excluding conflicts of law rules or
principles thereof. Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited by or invalid under
such law, such provision shall be ineffective only to the extent and duration of
such prohibition or invalidity, without invalidating the remainder of such
provision or invalidity, without invalidating the remainder or such provision or
the remaining provision of this Agreement. Any notice required or given
hereunder shall be deemed properly given upon hand delivery of the addressee or
three (3) days after mailed, postage prepaid, in each case, addressed to the
designated recipient at its address set forth herein or such other address as
such party may advise the other party by notice given in accordance with this
provision.
9.6 Lender and Borrower acknowledge that there are no agreements or
understandings, written or oral, between Lender and Borrower with respect to the
Loan, other than as set forth herein and in the Note and that this Agreement and
the Notes contain the entire agreement between Lender and Borrower with respect
thereto. Neither this Agreement or the Note may be altered, modified, terminated
or discharged except by a writing signed by the party against whom such
alteration, modification, termination or discharge is sought.
9.7 No omission, or delay, by Lender at any time to enforce any right or
remedy reserved to it, or to require performance of any of the terms, covenants
or provisions hereof by
<PAGE>
Borrower at any time designated, shall be a waiver of any such right or remedy
to which Lender is entitled, nor shall it in any way affect the right of Lender
to enforce such provision thereafter.
9.8 All agreements, representations and warranties contained in this
Agreement or the Note, or in any document delivered pursuant hereto or in
connection herewith shall be for the benefit of Lender and shall survive the
execution and delivery of this Agreement or the Note and the expiration or other
termination of this Agreement or the Note.
9.9 This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original, but all such counterparts together shall
constitute but one and the same instrument.
9.10 This Agreement shall be binding upon, and shall inure to the benefit
of, the successors and assigns of the Borrower and the Lender. The Lender agrees
that, in the event of any transfer by it of the Note, it will endorse thereon a
notation as to the portion of the principal of the Note which shall have been
paid at the time of such transfer and as to the date to which interest shall
have been last paid thereon.
9.11 Borrower will notify Lender of any proposed Merger at least sixty
(60) days prior to the closing date. Lender may, in its discretion, either (i)
consent to the assignment of the Loan Agreement and the Note to the successor
entity, or (ii) terminate the Loan Agreement and the Note. If Lender elects to
consent to the assignment, Borrower and its successor will sign the assignment
documentation provided by Lender. If lender elects to terminate the Loan
Agreement and Note, then Borrower will pay Lender on the date of closing of such
Merger all amounts then due and owing together with the Prepayment Amount.
IN WITNESS WHEREOF, the Borrower and the Lender have duly executed and
delivered this Loan Agreement as of the day and year first above written.
3-Dimensional Pharmaceuticals, Inc.
By:/s/ F. Raymond Salemme
-----------------------------------
Title: President & CEO
-------------------------------
COMDISCO, INC.
By: /s/ Jill C. Hanses
--------------------------------------
Titled: AVP / Venture Lease
--------------------------------------
<PAGE>
EXHIBIT A
PROMISSORY NOTE
$610,000 Date: April ___, 1994
Due: January 1, 1998
For value received, 3-Dimensional Pharmaceuticals Inc. (the "Borrower")
promises to pay to the order of Comdisco, Inc. (the "Lender") at P.O. Box 91744,
Chicago, IL 60693 (or such other address as the Lender shall designate to
Borrower) the principal amount of Six Hundred Ten Thousand Dollars ($610,000)
together with interest at the rate per annum reflected in the amortization
schedule attached hereto, from the date of this Note to maturity of each
installment on the principal hereof remaining from time to time unpaid, such
principal and interest to be paid in 42 equal monthly installments of $17,128
each, commencing June 1, 1994 and on the same of each month thereafter to and
including December 1, 1997 and a last installment of $91,500 to be paid on
January 1, 1998 such installments to be applied to accrued and unpaid interest
and the balance to unpaid principal. Because the Amortization Schedule reflects
the interest payable beginning June 1, 1994, Borrower shall pay Lender at
closing the interest in the amount of $570.96 per day for the number of days
beginning on the date Lender disburses the funds, through and including May 30,
1994. Interest shall be computed on the basis of a year consisting of twelve
months of thirty days each. Past due installments of principal and interest
shall bear interest at the maximum interest rate per annum permitted by law,
until paid.
This Note is the Note referred to in, and is entitled to the benefits of,
the Loan Agreement dated as of April ___, 1994 (as from time to time amended,
the "Loan Agreement"), between the Borrower and the Lender, to which Loan
Agreement reference is made as to the rights of the Lender, the Borrower and any
holder of this Note with respect to the acceleration of the maturity of the
Note. The Borrower may prepay this Note, in whole or in part, at any time but
only in accordance with the provisions of the Loan Agreement.
Upon the occurrence of any one or more Events of default (as defined in the
Loan Agreement), the owner and holder of this Note shall have the rights and
remedies set forth in the Loan Agreement, including the right, without notice or
demand except as otherwise provided in the Loan Agreement (both of which are
expressly waived by Borrower), to declare all sums owing hereon at once due and
payable.
The Borrower expressly waives demand and presentment for payment, notice of
nonpayment, protest, notice of protest, notice of dishonor, notice of intent to
accelerate the maturity hereof, notice of the acceleration of the maturity
hereof, brining of suit and diligence in taking any action to collect amounts
called for hereunder and in the handling of securities at any time existing in
connection herewith; and is and shall be directly and primarily liable for any
payment of all sums owing and to be owing hereon, regardless of and without any
amount called for hereunder or in connection with any right, lien, interest or
property at any and all times and or existing as security for any amount called
for hereunder.
<PAGE>
This Note and the right of the holders hereof shall be governed by and
construed in accordance with the laws of the State of Illinois, excluding any
conflicts of law rules or principles thereof, and applicable laws of the United
States of America.
3-Dimensional Pharmaceuticals, Inc.
By: /s/ Scott Horvitz
----------------------------------
Title: Vice President -- Finance
-------------------------------
<PAGE>
EXHIBIT B
3-DIMENSIONAL PHARMACEUTICALS
Amortization Schedule
Filename:35 dimat.wk4
Principal; 610,000 Payment: 17,128.80
Interest Rate: 15.1244815%
Payment Number Principal Interest Balance
-------------- --------- -------- -------
0 610,000.00
1 9,440.52 7,688.28 600,559.48
2 9,559.51 7,569.29 590,999.97
3 9,679.99 7,448.81 581,319.98
4 9,802.00 7,326.80 571,517.98
5 9,925.65 7,203.26 561,592.44
6 10,050.64 7,078.16 551,541.80
7 10,177.31 6,951.49 541,364.49
8 10,305.59 6,823.21 531,058.90
9 10,435.47 6,693.33 520,623.43
10 10,567.00 6,561.80 510,056.43
11 10,700.18 6,428.62 499,356.24
12 10,835.05 6,293.75 488,521.20
13 10,971.61 6,157.19 477,549.59
14 11,109.89 6,018.91 466,439.70
15 11,249.92 5,878.88 455,189.78
16 11,391.71 5,737.09 443,798.07
17 11,535.29 5,593.51 432,262.78
18 11,680.67 5,488.13 420,582.11
19 11,827.89 5,300.91 408,754.21
20 11,976.97 5,151.83 396,777.24
21 12,127.92 5,000.88 384,649.32
22 12,280.78 4,848.02 372,368.54
23 12,435.57 4,693.23 359,932.97
24 12,592.30 4,536.50 347,340.67
25 12,751.01 4,377.79 334,589.66
26 12,911.72 4,217.08 321,677.94
27 13,074.46 4,054.34 308,603.48
28 13,239.24 3,889.56 295,364.24
29 13,406.11 3,722.69 281,958.13
30 13,575.07 3,553.73 268,383.06
31 13,746.17 3,382.63 254,636.89
32 13,919.42 3,209.38 240,717.46
33 14,094.86 3,033.94 226,622.60
34 14,272.51 2,856.29 212,350.09
35 14,452.40 2,676.40 197,897.70
<PAGE>
36 14,634.55 2,494.25 183,263.14
37 14,819.00 2,309.80 168,444.15
38 15,005.77 2,123.03 153,438.37
39 15,194.90 1,933.90 138,243.47
40 15,386.42 1,742.38 122,857.05
41 15,580.34 1,548.46 107,276.71
42 15,776.71 1,352.09 91,500.00
43 91,500.00 1,153.24 (0.00)
<PAGE>
SUBORDINATION AGREEMENT
THIS SUBORDINATION AGREEMENT (this "Agreement") is made this 28th day
of April, 1994, by and among Comdisco, Inc., a ______________ corporation (the
"Comdisco"), the Hankin Group, a Pennsylvania partnership (the "Hankin") and
3-Dimensional Pharmaceuticals Inc., a Delaware corporation (the "Debtor").
B A C K G R O U N D
Hankin has made or intends to enter into a lease agreement ("Lease") with the
Debtor for premises to be constructed by Hankin at Lot 28, Eagleview Corporate
Center, Uwchlan Township, Chester County, Pennsylvania (the premises which are
or will be the subject of the Lease being hereinafter called the "Leased
Space"). Pursuant to the Lease, Debtor has granted to Hankin a security interest
under the Pennsylvania Uniform Commercial Code, in all personal property owned
by Debtor and now or hereafter located at the Leased Space, to further secure
all obligations of Debtor to Hankin under the Lease. The personal property
encumbered by Hankin"s security interest includes, without limitation, those
items of personal property defined as "Trade Fixtures" in the Lease, which are
more fully listed in Exhibit "A" attached hereto (if such list has not been
prepared as of the date hereof, Hankin and Debtor shall prepare and initial such
list, which shall then become part of this Agreement as Exhibit A). The "Trade
Fixtures" as defined in the Lease are referred to herein as "Trade Fixtures."
Comdisco has executed, or intends to execute, or intends to execute, an
equipment lease or leases (collectively the "Equipment Lease") with Debtor, for
a total rental of ___________ ($1,500,000.00) dollars. The property which is the
subject of the Equipment Lease is or will be located at the Leased Space, and is
collectively called the "Non-Trade Fixture Personally". The Non-Trade Fixture
Personally is more fully listed in Exhibit "B" attached hereto (if such list has
not been prepared as of the date hereof, Comdisco and Debtor shall prepare and
initial such list, which shall then become part of this Agreement as Exhibit B).
In the event of any inconsistency between Exhibits A and B such that any
personal property would appear to be both Trade Fixtures and Non-Trade Fixture
Personally, such personal property shall be deemed part of trade Fixtures only,
except that the parties agree that the total cost of Trade Fixtures shall not
exceed $100,000.00. In addition, Comdisco has made, or intends to make an
unsecured loan to Debtor in the stated principal amount of $610,000.00 (the
"Comdisco Loan"). The documents evidencing the Comdisco Loan are hereinafter
called the Loan Documents.
Debtor, Hankin and Comdisco acknowledge and agree that Hankin would not
enter into the Lease with Debtor, and Comdisco would not enter into the
Equipment Lease to Debtor, but for the covenants of as set forth in this
Agreement; it being agreed that the Lease benefits Comdisco, and the Equipment
Lease benefits Hankin.
1
<PAGE>
The parties desire to evidence their agreements as to the subordination
of some of the rights of Comdisco to the rights of Hankin, the subordination of
some of the rights of Hankin to the rights of Comdisco as more fully set forth
below.
NOW, THEREFORE, the parties hereto, each intending to be legally bound
hereby, agree as follows:
AGREEMENTS
NOW, THEREFORE, in consideration of the premises, One Dollar ($1.00)
and for other good and valuable consideration, the receipt and sufficiency of
which are acknowledged, the parties agree as follows:
1. Priority of Hankin as to Trade Fixtures. Hankin shall have the first
---------------------------------------
priority lien on and security interest in the Trade Fixtures. Comdisco shall
have no property rights in, lien on or security interest in the Trade Fixtures,
and hereby waives the right to levy, execute upon or assert any right in the
Trade Fixtures pursuant to any judgment obtained against Debtor or otherwise, it
being intended that any and all interest of Hankin in the Trade Fixtures shall
be free and clear of any interest of Comdisco therein. Hankin"s rights shall
apply regardless of the perfection, nonperfection, cessation of perfection or
order of perfection of the parties, respective interests. Comdisco agrees that
it shall give actual notice of the limitations on Comdisco"s right to levy upon
or execute against Trade Fixtures, upon any default under the Equipment Lease or
Loan Documents, to any assignee or third party acquiring any subsequent assignee
of the lessor"s or lender"s interest in the Equipment Lease or Loan Documents
respectively. Rankin hereby consents to the performance by Comdisco of any of
Debtor"s obligations under the Lease, and the assistant by Debtor to Comdisco of
its interest in the Lease, provided-that Comdisco"s financial statement is
reasonably judged by Hankin to be equal or superior to Debtor, s as of the date
of the assignment, and Comdisco agrees to assume and be bound by the provisions
of the Lease.
2. Priority of Comdisco as to Non-Trade Fixture Personalty. Any and all
-------------------------------------------------------
right, title and interest of Hankin in the Non-Trade Fixture Personalty is
under, subject and subordinate to rights of Comdisco therein pursuant to the
Equipment Lease. Hankin shall have a lien on and security interest in the rights
of Debtor in the Non-Trade Fixture Personalty pursuant to the Equipment Lease,
subject and subordinate to Comdisco"s rights therein. This priority shall apply
regardless of the perfection, nonperfection, cessation of perfection or order of
perfection of the parties" respective interests. Nothing contained herein shall
be deemed to limit any rights obtained by Comdisco as a permitted assignee of
Debtor"s rights under the Lease (in accordance with Section 12 (c) thereof), to
retain sublease rentals to which the "Tenant" under the Lease is entitled.
2
<PAGE>
3. Control of Property. Until all of the Debtor"s obligations (whether
-------------------
pre-existing or hereafter incurred) to Hankin have been performed or paid in
full (including, but not limited to, the payment of all Minimum Annual Rent and
Additional Rent which the Debtor is obligated to pay to Hankin) , Hankin shall
control the disposition of and the exercise of remedies with respect to the
Trade Fixtures in the event of a default by the Debtor in any of its obligations
to Hankin. Debtor and Comdisco hereby waive any and all claims against Hankin
which it may now or hereafter have on account of the Hankin"s action in using or
disposing of all or any of the Trade Fixtures. Comdisco waives any right to
control to timing, nature or extent of Hankin"s collection efforts against the
Debtor, including disposition of the Trade Fixtures. Hankin may exercise or
refrain from exercising its rights against the Debtor or the Trade Fixtures as
it may elect in its sale and absolute subjective discretion. Hankin hereby
consents to the installation of the Non-Trade Fixture Personalty within the
Leased Space, and shall permit Comdisco to enter the Leased Space upon
reasonable prior notice to Hankin for the purpose of exercising its rights under
the Equipment Lease. The Non-Trade Fixture Personalty shall not be considered
part of real property or a fixture, regardless of whether or by what means it is
or may become affixed to real property. In exercising its rights to remove the
Non-Trade Fixture Personalty pursuant to the Equipment Lease, Comdisco shall, at
its sole cost and expense, repair any damage to the Leased Space or the building
of which it is a part caused by Comdisco's negligence or failure to observe
reasonable precautions as Hankin may require, in the removal of the Non-Trade
Fixture Personalty.
4. Miscellaneous. No waiver of any of its rights and remedies hereunder
-------------
and no modification or amendment of this Agreement shall be deemed to be made
unless the same shall be in writing, duly by the parties hereto, and each such
waiver, if any, shall apply only with respect to the specific instance involved
and shall in no way impair the rights and remedies of the parties hereunder in
other respects at any other time. This Agreement shall be binding upon and
benefit the parties and their respective successors and assigns. Comdisco
irrevocably consents and submits to the jurisdiction and venue of the Court of
Common Pleas of Chester County, Pennsylvania, and of any other state or federal
court sitting in the Commonwealth of Pennsylvania over any suit, action or
proceeding arising out of or relating to this Agreement. Comdisco irrevocably
waives, to the fullest extent permitted by law, any objection that it may now or
hereafter have to the laying of the venue of any such suit, action or proceeding
brought in any such court and any claim that any such suit, action or proceeding
brought in any such court has been brought in an inconvenient forum. The section
headings of this Agreement are for convenience only and shall not limit or
otherwise affect any of the terms hereof. This Agreement shall be deemed
executed and delivered in and shall be construed, governed and enforced in
accordance with the laws of the Commonwealth of Pennsylvania in effect from time
to time.
IN WITNESS OF, the parties have caused this Agreement to be executed,
under seal, on the date and year first above written.
3
<PAGE>
WITNESS/ATTEST: COMDISCO, INC.
___________________________ BY: /s/ Jill C. Hanses
------------------
NAME: AVP / Venture Lease
TITLE:
THE HANKIN GROUP
/s/ John C. Purcell, Jr. BY: /s/ Robert S. Hankin
--------------------------- --------------------
NAME: Robert S. Hankin
TITLE: General Partner
WITNESS/ATTEST: 3-DIMENSIONAL PHARMACEUTICALS, INC.
/s/ Scott Horvitz BY: /s/ F. Raymond Salemme
--------------------------- ----------------------
NAME: F. Raymond Salemme
TITLE: President & CEO
27875SUB.BNK
04/28/94 3:14pm
4
<PAGE>
STATE OF :
SS:
COUNTY OF :
On this _________ day of _______________ 1994, before me, the
undersigned, a Notary Public of the State of __________________________,
personally appeared ____________ who acknowledged himself/herself to be the
__________ of COMDISCO, INC., a being duly authorized to do so, executed the
foregoing agreement for the purposes therein contained by signing the name of
the said entity by himself/herself as _________________.
As witness-my hand and Notary Public.
-----------------------------------------
my commission expires: _________________________________
STATE OF PENNSYLVANIA :
SS:
COUNTY OF CHESTER :
On this the 25th day of April 1994, before me, the
undersigned, a Notary Public of the State of Pennsylvania,(personally appeared
Robert S. Hankin, who acknowledged himself to be a partner of THE HANKIN GROUP,
a Pennsylvania partnership, and that he/she as such partner, being duly
authorized to do so, executed the foregoing agreement for the purposes therein
contained by signing the name of the said entity by himself /herself as partner.
/s/ Kathleen A. Urban
-------------------------------------
My Commission expires: April 1, 1996
5
<PAGE>
STATE OF ILLINOIS :
SS:
COUNTY OF COSH :
On this 7th day of July 1994, before me, the
undersigned, a Notary Public of state of Illinois, personally appeared Jill C.
Hanses, who acknowledged himself/herself to be the Assistant Vice President of
COMDISCO, INC., a corporation and that he/she as being duly authorized to do so,
executed the foregoing agreement for the purposes therein contained by signing
the name of the said entity by himself/herself as Assistant Vice President.
As witness my hand and Notary Public.
/s/ Eileen M. Bagarella
-----------------------
My commission expires: 7/11/97
STATE OF PENNSYLVANIA :
SS:
COUNTY OF CHESTER :
On this the 28th day of April 1994, before me, the
undersigned, a Notary Public of the State of Pennsylvania,(personally appeared
Robert S. Hankin, who acknowledged himself to be a partner of THE HANKIN GROUP,
a Pennsylvania partnership, and that he/she as such partner, being duly
authorized to do so, executed the foregoing agreement for the purposes therein
contained by signing the name of the said entity by himself /herself as partner.
/s/ Kathleen A. Urban
---------------------------------
My Commission expires: April 1, 1996
6
<PAGE>
STATE OF :
SS:
COUNTY OF :
On this 28th day of April, 1994 before me, the undersigned, a
Notary Public of the State of Pennsylvania, personally appeared F. Raymond
Salemme who acknowledged himself to be the President of 3-DIMENSIONAL
PHARMACEUTICAL, INC., a Delaware corporation, and that he/she as such officer,
being duly authorized to do so, executed the foregoing agreement for the
purposes therein contained by signing the name of the said entity by
himself/herself as officer.
As witness my hand and Notary Public.
/s/ Kathleen A. Urban
---------------------------
My commission expires: April 1, 1996
27875sub/bnk
7
<PAGE>
EXHIBIT A
(MULTIPLE QUARTER DELIVERY)
SCHEDULE No. VL-2 DATED AS OF April 25, 1995
---- --------------
TO MASTER LEASE AGREEMENT DATED AS OF March 7, 1994 ("MASTER LEASE")
-------------
LESSEE: 3-DIMENSIONAL LESSOR: COMDISCO, INC,
PHARMACEUTICALS, INC.
Admin.contact/Phone No.: Address for all Notices:
----------------------- -----------------------
Scott Horvitz
(610) 458-6043 6111 North River Road
Rosemont, Illinois 60018
Attn.: Capital Equipment Lease
Administration
Address for Notices:
-------------------
Eagleview Corporate Center
665 Stockton Drive, Suite 104
Exton, PA 19341
Attn.: Scott Horvitz
Central Billing Location: PAYING AGENT:
Same as Above Comdisco, Inc.
P.O. Box 91744
Chicago, Illinois 60693
Attn.:
Lessee Reference No.: _______________________
(24 digits maximum)
Location of Equipment: Initial Term: 48 months
--------------------- ------------ ---------
Same as Above
1
<PAGE>
<TABLE>
Attn.: Lease Rate Factor: 2.493%
EQUIPMENT (as defined below); Advance: $2,493.00-due upon execution
$9,972.00-due at release of
Phase II funds
$12,465.00-due at the time
Lessee has expended the first
$500,000 of this lease
financing
$12,465.00-due at release of
Phase III funds
Item Machine Type/ Serial
No. Qty. Manufacturer Feature Description Number Rent
------ ----- ------------ --------------- ----------- ------ ----
<S> <C> <C> <C> <C> <C> <C>
</TABLE>
Equipment specifically approved by Lessor, which shall be delivered to and
accepted by Lessee during the period April 26, 1995 through April 26, 1996 (the
"Acceptance Period"), for which Lessor receives vendor invoices approved for
payment, up to an aggregate purchase price of:
Phase I: $200,000.00 Available immediately
Phase II: $800,000.00 The release of Phase II shall be wholly contingent upon
the completion of the current round of equity financing and $4
million being raised.
Phase III: $500,000.00 The release of Phase III shall be wholly contingent upon
Lessor's review of Lessee's progress.
Equipment shall not include upgrades, leasehold improvements, installation costs
and delivery Costs, rolling stock, special tooling, custom equipment, hand held
items, molds and fungible items. In addition, the Acceptance Period shall be
extended an additional six (6) months until October 26, 1996 at Lessor's
discretion after Lessor's independent review of Lessee's performance. In the
event Lessee requests and Lessor releases Phase II of this lease financing, the
total software financed under Phase II shall not exceed $100,000.00. Software
shall not be financeable under Phase I and Phase III of this lease financing.
2
<PAGE>
1. Notice Period: Not less than one hundred and twenty (120) days nor more
than twelve (12) months prior to the expiration of the lease term.
2. Equipment Purchase
Lessee acknowledges that it has either received or approved Lessor's
purchase documentation for the Equipment. The aggregate purchase price referred
to on the face of this Schedule shall include all Equipment purchased by Lessor,
consisting of amounts financed under Sections (1), (it) and (iii) below.
(i) NEW EQUIPMENT. Lessor will purchase new Equipment which is
specifically approved by Lessor.
(ii) SALE-LEASEBACK EQUIPMENT. Any in-place Equipment installed at
Lessee's site and to which Lessee has clear title and ownership may be
considered by Lessor for Inclusion under this Loss (the "Sale-Leaseback
Transaction"). Any request for a Sale-Lease Transaction must be submitted to
Lessor in writing (along with accompanying evidence of Lessee's Equipment
ownership satisfactory to Lessor for all Equipment submitted) no Later than May
26, 1995 *. Lessor will not perform a Sale-Leaseback Transaction for any request
or accompanying Equipment ownership documents which arrive after the date marked
above by an asterisk (*). Further, any sale-leaseback Equipment will be placed
on loss* subject to: (1) Lessor prior approval of the Equipment; and (2) if
approved, at Lessor's actual not appraised Equipment value pursuant to the
schedule below:
Between 2/27/95 and 5/26/95 100%
Between 12/27/94 and 2/26/95 80%
Between 9/27/94 and 12/26/94 70%
Between 6/27/94 and 9/26/94 65%
Between 3/27/94 and 6/26/94 60%
(iii) USED EQUIPMENT. Lessor will purchase "used" Equipment which is obtained
from a third party by Lessee for its use Subject to: (1) Lessor's prior
approval of the Equipment; and (2) at the request of Lessor, at Lessor's
appraised value for such used Equipment.
3. Commencement Date
The Commencement Date for each item of Equipment will be its Installation
Date. Lessee agrees to confirm the Commencement Date providing Lessor with
Invoices containing the Equipment location, description, serial number and cost,
the Installation Date and Lessee's signature. Lessor will summarize all Invoices
and/or IAFs received in the same calendar quarter
3
<PAGE>
into a Commencement Certificate in the form attached to this Schedule as Exhibit
I and the Initial Term will begin the first day of the calendar quarter
thereafter. Each Commencement Certificate will incorporate the terms and
conditions of the Master Lease and this Schedule and will constitute a separate
Schedule. Notwithstanding the foregoing, if the Equipment pertains to Sale-
Leaseback Equipment, the Commencement Date will be the date Lessor tenders the
purchase price for the Equipment.
4. Option to Extend
So long as no Event of Default shall have occurred and be continuing,
Lessee will have the right to extend the Initial Term of this Schedule for a
period of one (1) year by giving Lessor at least one hundred and twenty (120)
days written notice prior to the expiration of the Initial Term. In such event,
the rent to be paid during said extended period shall be mutually agreed upon
and if the parties cannot mutually agree, then the Lease shall continue in full
force and effect pursuant to the existing term and conditions until terminated
in accordance with its terms. This Schedule will continue in effect following
said extended period until terminated by either party upon not less than one
hundred and twenty (120) days prior written notice, which notice shall be
effective as of the Rent Interval next following receipt. Alternatively, at the
expiration of the Initial Term Losses will have the right to extend the Initial
Term of this Schedule for a on* year period at the same tense rate factor as set
forth on the face of this Schedule, by giving Lessor at least 120 days written
notice prior to the expiration of the Initial Term, and at the end of the one
year period, provided all lease payments have been made, title to the Equipment
shall automatically pass to Lessee.
5. Purchase Option
So long as no Event of Default has occurred and is continuing hereunder,
and upon written notice no earlier than twelve (12) months and no later than one
hundred and twenty (120) days prior to the expiration of the initial Term of
this Schedule, Lessee wilt have the option at the expiration of the Initial Term
of this Schedule to purchase all but not less than sit, of the Equipment listed
herein for a purchase price and upon terms and conditions to be mutually agreed
upon by the parties following Lessee's written notice, plus any taxes applicable
at time of purchase. Said purchase price shall be paid to Lessor at least thirty
(30) days before the expiration date of the Initial Term. Title to the Equipment
shall automatically pass to Lessee upon payment in full of the purchase price
but, in no event, earlier then the expiration of the fixed initial Term. If the
parties are unable to agree on the purchase price or the terms and conditions
with respect to said purchase, then the Lease with respect to this Equipment
shall remain in full force and affect. It is agreed and understood that Lessor
is retaining a purchase money security interest in the Equipment Listed herein
and this Schedule shall constitute a Security Agreement under the Uniform
Commercial Code of the state in which the Equipment is located. Lessor and
Lessee agree that for purposes of this paragraph, any Licensed software will not
be considered part of the equipment.
6. Special Term
4
<PAGE>
The terms and conditions of the Master Lease Agreement as they pertain to this
Schedule are hereby modified and amended as follows:
(a) Section 5.2, "Relocation or Sublease"
----------------------
To the end of this Section, add the following:
", provided that Lessee may relocate Equipment to the premises of academic
researchers working on joint projects with the Lessee, at Lessee's sole expense,
without the prior written consent of the Lessor if the Lessee provides the
Lessor with prior written notice."
(b) Section 6.2, "Taxes and Fees,
In line 4 after the word "capital", add the words "not worth"; before the
word "income", delete the word "not",
(c) Section 7.1, "Care, Use and Maintenance"
Delete this Section in its entirety and replace with the following:
"Lessee shall, at its sole expense, at all times during the term of each
Equipment Schedule, maintain the Equipment in good operating order, repair,
condition and appearance and protect the Equipment from deterioration, other
than normal wear and tear. Lessee shall not use the Equipment for any purpose
other then that for which it was designed Lessee shall, at its sole expense and
at its sole discretion, either (I) enter into and maintain in force, for the
term of each Equipment Schedule, an appropriate maintenance contract with the
manufacturer of the Equipment, or such other party as shall be acceptable to
Lessor, and shall provide Lessor with a copy of such contract and all
supplements thereto which are applicable to the Equipment; or (ii) self maintain
the Equipment at acceptable standards. If Lessee returns the Equipment to Lessor
at the end of the Initial Term of this Lease or any extension thereof, and upon
mail of the Equipment Lessor determines that the Equipment has not been
maintained property or will not be eligible for a manufacturer's maintenance
contract, then Lessee hereby agrees to assume any costs or expenses necessary to
ensure that the Equipment is in good working order, which may include but need
not include, recertification by the manufacturer. For the purposes of this
Section, any reference to "Equipment" shall include any software included in any
such Equipment Schedule, and any reference to "manufacturer" shall mean the
Licensor thereof."
(d) Section 7.2, "Attachments and Reconfigurations"
In line 1 before the word "prior", insert the word "after"; after the word
"written", delete the word "consent" and replace with the words "notice
to".
In line 3 before the word "restore" insert the words "have the option to".
In line 5 after the word "excluded", add the words "or else such
Reconfigurations or Attachments shall become the property of the Lessor."
5
<PAGE>
(e) Section 8, "Representations and warranties of Lessee"
----------------------------------------
To the end of subsection (e), add the words 11, and except in connection
with the transactions contemplated with the Lessor and The Hankin Group."
(f) Section 9, "Delivery and Return of Equipment"
In line 9, delete the words "and Lessee will supply any of its personnel";
to the end of the last sentence, add the phrase, "subject to Lessee's normal
security procedures and during reasonable hours upon reasonable advance notice."
(g) Section 13.1, "Default"
-------
In line 3 of subsection (b), delete the word "ten (10)" and replace with
the word "fifteen (15)".
(h) Section 14.1, "Board Attendance"
----------------
Delete this section in its entirety and replace with the following:
"Section 14.1, Board information.
-----------------
Lessee agrees to provide to Lessor on a monthly basis: Profit and Loss
Statement, Balance Sheet, Cash Flow Statement and Proforma Operating Plan
(as developed)."
(i) Section 14.2, "Financial Statements"
--------------------
In line 5 after the word "required", delete the word "by" and replace with
the words "to be filed with:.
In lines 7 and 8, delete the words "the same information which Losses
provides to its Board of Directors, but which will include not less than".
In line 10, delete the word "ninety (90)" and replace with the words
"one hundred twenty (120)".
In line 12, delete the words "the financial position" and replace with the
words "cash flows".
In line 15, delete the words "additional information (including but not
limited to".
In line 16 before the word "Lessor", insert the words "requested by Lessor
that".
(j) Section 14.3, "Obligation to Lease Additional Equipment"
----------------------------------------
6
<PAGE>
To the end of this Section, add the following:
"Notwithstanding the foregoing, Lessor shall not withhold its consent if
the acquiring entity has a Moody's bond rating of BA3 or better, or the
equivalent if no bond rating is available."
(k) Section 14.4, "Merger and Sale Revisions"
-------------------------
In line 1, delete the word "sixty (60)," and replace with the word "thirty
(30)".
(l) Section 14.14, "Additional Documents"
--------------------
To the end of this Section, add the words "in a form mutually acceptable to
the parties."
Register Lease: This Schedule is issued pursuant to the Master Lease identified
on page 1 of this Schedule. All of the terms and conditions of the Master Lease
are incorporated in and made a part of this Schedule as if they were expressly
set forth in this Schedule. The parties hereby reaffirm all of the terms and
conditions of the Master Lease (including, without limitation, the
representations and warranties set forth in Section 8) except as modified herein
by this Schedule.
3-DIMENSIONAL PHARMACEUTICALS, INC. COMDISCO, INC.
as Lessee as Lessor
By: /s/ Scott Horvitz By: /s/ James P. Labe
--------------------------------- ----------------------------------
Title: Vice President and CFO Title: Pres. - Venture Lease
------------------------------ -------------------------------
Date: 5/3/95 Date: 5/30/95
------------------------------- --------------------------------
DRS; 4/26/95
7
<PAGE>
EXHIBIT 1
COMMENCEMENT CERTIFICATE
------------------------
This Certificate dated is "executed pursuant to Schedule No. VL-2 to the
Master Lease Agreement dated March 7, 1994 between Comdisco, Inc. ("Lessor") and
3-Dimensional Pharmaceuticals, Inc. ("Lessee"). All of the term, conditions,
representatives and warranties of the Master Lease and Schedule No. VL-2 are
incorporated herein and made a part hereof and this Commencement Certificate
constitutes a Schedule for the Equipment described below.
1. Equipment:
Equipment
Qty Mfgr Type/Model Serial # Location
--- ---- ---------- -------- --------
(See attached Invoices)
2. Installation Date: (See attached Invoices)
-----------------
3. Initial Term Starts on:
----------------------
4. Total Equipment Cost:
--------------------
5. Rent:
----
6. Representations of Lessee:
-------------------------
Each item of Equipment has been delivered to the location indicated above,
tested, inspected, found to be in good working order and accepted by the
Lessee on its Installation Date.
8
<PAGE>
August 23, 1995
Mr. Scott Horvitz
Vice President and Chief Financial Officer
3-Dimensional Pharmaceuticals, Inc.
Eagleview Corporate Center
665 Stockton Drive, Suite 104
Exton, PA 19341
Re: Equipment Schedule VL-2 dated as of April 25, 1995 to the Master Lease
Agreement dated as of March 7, 1994 by and between Comdisco, Inc.
("Lessee") and 3-Dimensional Pharmaceuticals, Inc. ("Lessee") collectively,
the "Lease".
Dear Scott:
This letter is to confirm our agreement whereby Comdisco, as Lessor, hereby
agrees to release up to $200,000.00 of the Phase II equipment financing pursuant
to the terms and conditions of the above mentioned Lease.
Please indicate your acceptance of the above agreement by signing in the space
provided below and returning this letter and a check for the Advance Rent in the
amount of $2,493.00 to my attention at your earliest convenience. Please do not
hesitate to call me if you have any questions.
Sincerely,
/s/ Deborah R. Smith
Deborah R. Smith
Agreed and Accepted:
cc: Lisa DiSilvio By: /s/ Scott Horvitz
Comdisco Ventures
Title: VP and CFO
Date: 8/25/95
9
<PAGE>
September 4, 1996
Mr. Scott Horvitz
3-Dimensional Pharmaceuticals, Inc.
Eagleview Corporate Center
665 Stockton Drive, Suite 104
Exton, PA 19341
Re: Equipment Schedule No. VL-2 dated as of April 25, 1995 to the Master Lease
Agreement dated as of March 7, 1994 by and between Comdisco, Inc.
("Lessee") and 3-Dimensional Pharmaceuticals, Inc. ("Lessee") collectively,
the "Lease".
Dear Scott:
This letter is to confirm our agreement with respect to the above mentioned
Lease whereby Lessor will release an additional $250,000.00 of equipment
financing. In addition, Lessee shall be allowed to lease such equipment until
November 30, 1996 in accordance with the terms and conditions of such Lease.
Also, please note that per the terms of Equipment Schedule VL-2, once Lessee has
utilized a total of $500,000.00 of lease financing an additional Advance Rent in
the amount of $12,465.00 will be due. Prior to the release of this $250,000.00,
Lessee has expended $329,771.03 towards this $500,000.00 Advance Rent milestone.
Please indicate your acceptance of the above agreement by signing in the space
provided below and returning this letter and a check for the Advance Rent in the
amount of $3,116.25 to my attention at your earliest convenience. If you have
any questions or comments-please do not hesitate to call me at (617) 630-5515.
Sincerely,
/s/ Deborah R. Smith
Deborah R. Smith
Regional Portfolio Manager
Agreed and Accepted:
By: /s/ Scott Horvitz
Title: Vice President & CFO
Date: September 4, 1996
cc: Carrie Loepke; Comdisco Ventures
10
<PAGE>
November 22, 1996
Mr. Steven O'Brien
3-Dimensional Pharmaceuticals, Inc.
665 Stockton Drive, Suite 104
Exton, PA 19341
Dear Steven:
RE: Equipment Schedule No. VL-2 dated as of April 25, 1995 to the Master Lease
Agreement dated as of March 7, 1994
This letter is to confirm our agreement with respect to the above
referenced Equipment Schedule whereby 3-Dimensional Pharmaceuticals, Inc. as
Lessee, shall be allowed to lease equipment from November 30, 1996 to January
31, 1997 in accordance with the terms and conditions of such schedule.
If you are in agreement with the above, please so indicate by signing this
letter and returning to my attention.
Sincerely,
/s/ Carrie Loepke
Carrie Loepke
Sr. Account Specialist
Comdisco Ventures
AGREED AND ACCEPTED TO THIS 26th DAY OF NOVEMBER, 1996
3-DIMENSIONAL PHARMACEUTICALS COMDISCO, INC.
By: /s/ Scott Horvitz By: /s/ James P. Labe
---------------------------------- ------------------------------------
Title: VP & CFO Title: President, Venture Lease Div.
------------------------------- ---------------------------------
Date: 11/26/96 Date: 11/26/96
-------------------------------- ----------------------------------
11
